PLACEMENT AGENCY AGREEMENT
THIS AGREEMENT ("Agreement"), made as of the 26 day of May, 2000, by
and between Saf T Lok Incorporated, a Florida corporation ("Company"), and X.X.
Xxxxx Securities, Inc., a Georgia corporation (the "Agent").
WITNESSETH:
WHEREAS, the Company proposes to issue and sell 6% Subordinated
Convertible Debentures (the "Securities") resulting in gross proceeds to the
Company of a maximum of $875,000 in an offering (the "Offering") not involving a
public offering without registration under the Securities Act of 1933, as
amended (the "Act"), pursuant to exemptions from the registration requirements
of the Act under Regulation D promulgated under the Act ("Regulation D") and or
Rule 4(2) under the Act as described below; and
WHEREAS, the Agent has offered to assist the Company in placing the
Securities on a "best efforts" basis with respect to the sale of Debentures and
the Company desires to secure the services of the Agent on the terms and
conditions hereinafter set forth;
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
promises, conditions and covenants herein contained, the parties hereto do
hereby agree as follows:
1. Engagement of Agent. The Company hereby appoints the Agent as its
non-exclusive placement agent for the Offering, to sell on a "best efforts"
basis up to a maximum of $875,000 of Securities (the "Maximum Securities") in
one or more tranches. The Agent, on the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, accepts such appointment and agrees to use its best efforts to find
purchasers for the Securities. This appointment shall be irrevocable for the
period commencing on May 26, 2000, and ending thirty (30) days, which period
maybe extended by the consent of the Company and the Agent (the "Offering
Period").
2. Representations and Warranties of the Company. In order to induce
the Agent to enter into this Agreement, the Company hereby represents and
warrants to and agrees with the Agent as follows:
2.1 Offering Documents. The Company and the Placement Agent have
prepared a Securities Purchase Agreement, certain exhibits thereto, Registration
Rights Agreement, and the Debentures regarding the Securities, which documents
have been or will be sent to proposed investors. Since January 1, 1997, the
documents which have been filed by the Company with the U.S. Securities and
Exchange Commission have been prepared in conformity with the requirements (to
the extent applicable) of the Securities and Exchange Act of 1934, as amended,
and the rules and regulations ("Rules and Regulations") of the Commission
promulgated thereunder. As used in this Agreement, the term "Offering Documents"
refers to and means the SEC Documents, the Subscription Agreement and all
amendments, exhibits and supplements thereto, together with any other documents
which are approved for Agent's use by the Company for the purpose of this
Offering.
2.2 Provision of Offering Documents. The Company shall deliver to the
Agent, without charge, as many copies of the Offering Documents as the Agent may
reasonably require for the purposes contemplated by this Agreement. The Company
authorizes the Agent, in connection with the Offering of the Securities, to use
the Offering Documents as from time to time amended or supplemented in
connection with the offering and sale of the Securities and in accordance with
the applicable provisions of the Act and Regulation D. The Company consents to
the Agent's distribution of the Offering Documents to prospective subscribers as
a disclosure document about the Company, its business, prospects, financial
condition and other matters and is legally permitted to do so.
2.3 Accuracy of Offering Documents. Taken together, the Offering
Documents, at the time of delivery to subscribers for the Securities, conformed
in all material respects with the requirements, to the extent applicable, of the
Act and the applicable Rules and Regulations and did not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. On the Closing Date
(as hereinafter defined), the Offering Documents, taken together, will contain
all material statements which are required to be stated therein in accordance
with the Act and the Rules and Regulations for the purposes of the proposed
Offering, and all statements of material fact contained in the Offering
Documents will be true and correct, and the Offering Documents will not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the Company does not make any representations or warranties as to
the information contained in or omitted from the Offering Documents in reliance
upon written information furnished on behalf of the Agent specifically for use
therein.
2.4 Duty to Amend. If during such period of time, as in the opinion of
the Agent or its counsel, any Offering Documents relating to this Offering are
required to be delivered under the Act, any event occurs, or any event known to
the Company relating to or affecting the Company shall occur as a result of
which the Offering Documents as then amended or supplemented would include an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if it is necessary at any time after
the date hereof to amend or supplement the Offering Documents to comply with the
Act or the applicable Rules and Regulations, the Company shall forthwith notify
the Agent thereof and shall prepare such further amendment or supplement to the
Offering Documents as may be required and shall furnish and deliver to the Agent
and to others, whose names and addresses are designated by the Agent, all at the
cost of the Company, a reasonable number of copies of the amendment or
supplement or of the amended or supplemented Offering Documents which, as so
amended or supplemented, will not contain an untrue statement of a material fact
or omit to state any material fact necessary in order to make the Offering
Documents not misleading in the light of the circumstances when it is delivered
to a purchaser or prospective purchaser, and which will comply in all respects
with the requirements (to the extent applicable) of the Act and the applicable
Rules and Regulations.
2.5 Corporation Condition. The Company's condition is as described in
its Offering Documents, except for changes in the ordinary course of business
and normal year-end adjustments that are not in the aggregate materially adverse
to the Company. The Offering Documents, taken as a whole, present fairly the
business and financial position of the Company as of the Closing Date.
2.6 No Material Adverse Change. [LEFT INTENTIONALLY BLANK]
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2.7 No Defaults. The execution and delivery of this Agreement, and the
consummation of the transactions herein contemplated, and compliance with the
terms of this Agreement will not conflict with or result in a breach of any of
the terms, conditions or provisions of, or constitute a default under, the
Articles of Incorporation or By-Laws of the Company (in any respect that is
material to the Company), any material note, indenture, mortgage, deed of trust,
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or other material agreement or instrument to which the Company is a party or by
which the Company or any property of the Company is bound, or to the Company's
knowledge, any existing law, order, rule, regulation, writ, injunction or decree
of any government, governmental instrumentality, agency or body, arbitration
tribunal or court, domestic or foreign, having jurisdiction over the Company or
any property of the Company. The consent, approval, authorization or order of
any court or governmental instrumentality, agency or body is not required for
the consummation of the transactions herein contemplated except such as may be
required under the Act or under the Blue Sky or securities laws of any state or
jurisdiction.
2.8 Incorporation and Standing. The Company is, and at the Closing Date
will be, duly formed and validly existing in good standing as a corporation
under the laws of the State of Florida with full power and authority (corporate
and other) to own its properties and conduct its business, present and proposed,
as described in the Offering Documents; the Company, has full power and
authority to enter into this Agreement; and the Company is duly qualified and in
good standing as a foreign entity in each jurisdiction in which the failure to
so qualify would have a material adverse effect on the Company or its
properties.
2.9 Legality of Outstanding Securities. Prior to the Closing Date, the
outstanding securities of the Company have been duly and validly authorized and
issued, fully paid and nonassessable and conform in all material respects to the
statements with regard thereto contained in the Offering Documents.
2.10 Legality of Securities. The Securities, when sold and delivered,
will constitute legal, valid and binding obligations of the Company, enforceable
in accordance with the terms thereof, and shall be duly and validly issued and
outstanding, fully paid and nonassessable. The Common Stock into which the
Securities are convertible, upon conversion in accordance with the Company's
Debentures shall be duly and validly issued and outstanding, fully paid and
non-assessable.
2.11 Litigation. Except as set forth in the Offering Documents, there
is now, and at the Closing Date there will be, no action, suit or proceeding
before any court or governmental agency, authority or body pending or, to the
knowledge of the Company, threatened, which might result in judgements against
the Company not adequately covered by insurance or which collectively might
result in any material adverse change in the condition (financial or otherwise)
or business of the Company or which would materially adversely affect the
properties or assets of the Company.
2.12 Finders. The Company does not know of any outstanding claims for
services in the nature of a finder's fee or origination fees with respect to the
sale of the Securities hereunder for which the Agent may be responsible.
2.13 Tax Returns. The Company has filed all federal and state tax
returns which are required to be filed, and has paid all taxes shown on such
returns and on all assessments received by it to the extent such taxes have
become due. All taxes with respect to which the Company is obligated have been
paid or adequate accruals have been set up to cover any such unpaid taxes.
2.14 Authority. The execution and delivery by the Company of this
Agreement have been duly authorized by all necessary action, and this Agreement
is the valid, binding and legally enforceable obligation of the Company subject
to standard qualifications as to the availability of equitable remedies, the
effect of bankruptcy and other laws relating to the protection of debtors and
public policy opinions promulgated by the Commission with respect to
indemnification against liabilities under the Act.
2.15 Actions by the Company. Except as contemplated hereby, the Company
will not take any action which will impair the effectiveness of the transactions
contemplated by this Agreement.
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3. Issue, Sale and Delivery of the Securities.
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3.1 Deliveries of Securities. Certificates in such form that, subject
to applicable transfer restrictions imposed by applicable law, and as described
in the Securities Purchase Agreement, they can be negotiated by the purchasers
thereof (issued in such denominations and in such names as the Agent may direct
the Company to issue) for the Securities, and shares of Common Stock
representing the Agent's compensation described in Section 3.4 below (the "Agent
Shares"), shall be delivered by the Company to the Escrow Agent, with copies
made available to the Agent for checking at least one (1) full business day
prior to the Closing Date, it being understood that the directions from the
Agent to the Company shall be given at least two (2) full business days prior to
the Closing Date. The certificates for the Securities and the Agent Shares shall
be delivered at the Closing and at each Subsequent Closing (as defined
hereinafter).
3.2 Escrow of Funds. Pursuant to the Escrow Agreement, a copy of which
is attached hereto as Exhibit "A" (the "Escrow Agreement"), executed by the
Company, the Agent and the escrow agent (the "Escrow Agent"), the subscribers
shall place all funds for purchase of Securities for each Closing in an escrow
account. The Company shall have the right to approve or reject the subscriptions
of each subscriber, as described in the Subscription Agreement prior to each
closing. At such time as subscribers subscribing for at least $200,000 of
Securities (but not more than the Maximum Securities, unless otherwise agreed by
the Company and Agent) have delivered to the Agent their signed subscription
documents, those subscribers have been approved by the Company and all other
Closing conditions have been met, Escrow Agent shall release the subscription
funds to the Company and the Agent shall release the certificates representing
the Securities to the subscribers (the "Initial Closing"). In the event that the
Initial Closing shall be for an amount of Securities less than the Maximum
Amount, the Offering may be continued, and additional Closings may be held (each
a "Subsequent Closing") throughout the Offering Period. In addition, the Agent
shall have the right to act as agent for the sale of additional Debentures or
Securities as set forth in Section 5 herein.
3.3 Closing Date. The Initial Closing and any Subsequent Closing shall
take place at the offices of Xxxx Xxxx Xxxxx & Xxxxx LLP, 000 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxx 000, 0000 Xxxxxxxxx Xxxx, XX, Xxxxxxx, Xxxxxxx 00000 at such time
and date ("Closing Date") as will be fixed either orally or in writing by notice
to be given by the Agent to the Company after consultation with the Company,
such Closing Date to be not less than one (1) full business day after the date
on which such notice shall have been given and not less than one (1) and not
more than three (3) full business days after the date on which the Escrow Agent
shall have given written notice to the Company and the Agent that funds
deposited with the Escrow Agent total at least the Minimum Proceeds. The Closing
Date may be changed by mutual agreement of the Agent and the Company.
3.4 Agent's Compensation. The Company shall pay the Agent:
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(a) A commission of six percent (6.0%) of the gross
subscription proceeds of the Initial Offering and any subsequent
Offerings; and
(b) In addition to the fees and reimbursement of costs set
forth in Section 3.5 of this Agreement, the Company shall issue to the
Agent three shares of the Company's Common Stock for each $100.00 of
gross subscription proceeds raised by the Agent in the Offering (the
"Agent Shares"). The Agent shares shall have piggy-back registration
rights. The Agent Shares shall be delivered by the Company to the Agent
simultaneous with each Closing. However, the Agent shares to be
delivered at the first Closing shall be delivered to the Agent no later
than 15 days following the first Closing.
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3.5 Payment of Fees. The Escrow Agent shall be instructed to pay the
Escrow Agent's fees and commissions pursuant to section 3.4 of this Agreement,
directly to the Agent from the proceeds of the Closing and all Subsequent
Closing, simultaneous with the transfer of proceeds to the Company.
4. Offering of the Securities on Behalf of the Company.
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4.1 In offering the Securities for sale, the Agent shall offer them
solely as an agent for the Company, and such offer shall be made upon the terms
and subject to the conditions set forth in the Offering Documents. The Agent
shall commence making such offer as an agent for the Company as soon as possible
following delivery of the Offering Documents.
4.2 The Agent will not make offers to sell the Securities to, or
solicit offers to subscribe for any Securities from, persons or entities that
are not "accredited investors" as defined in Regulation D.
4.3 The Agent shall make offers and sales of the securities only in
such jurisdictions where it is permitted to do so in accordance with applicable
law.
5. Right of First Refusal. The Company hereby grants Agent rights of
first refusal as follows:
5.1 INTENTIONALLY LEFT BLANK
5.2 The Company agrees to maintain the confidentiality of the Agent's
clients, except as required by applicable law. Such clients shall be those
entities which invest in the Offering (the "Clients"). For a period of two years
from the Closing (the "Exclusivity Period"), the Company will not solicit or
enter into any financing transaction ("Transaction") with the clients without
the written consent of Agent and payment to the Agent of like compensation as
the compensation described herein.
5.3 In the event that Company breaches Section 5.2 of this Agreement
and engages in a Transaction with the Clients during the Exclusivity Period or
breaches Section 5.1 of this Agreement, Agent shall be entitled to receive
compensation in the same proportion to the financing done without Agent's
participation as the compensation to Agent under this Agreement bears to the
financing raised in this Offering.
6. Covenants of the Company. The Company covenants and agrees with the
Agent that:
6.1 As a condition precedent to the Initial Closing, the
Company will deliver to the Agent a true and correct copy of the Articles of
Incorporation of the Company, and all amendments and certificates of designation
of preferences of preferred stock, including without limitation the certificate
of designation of preferences regarding the Securities, if applicable, certified
by the Secretary of State of Delaware.
6.2 Prior to the Closing Date, the Company will cooperate
with the Agent in such investigation as it may make or cause to be made of all
of the properties, business and operations of the Company in connection with the
Offering of the Securities. The Company will make available to it in connection
therewith such information in its possession as the Agent may reasonably request
and will make available to the Agent such persons as the Agent shall deem
reasonably necessary and appropriate in order to verify or substantiate any such
information so supplied, subject to the limitations arising pursuant to the
federal securities laws.
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7. Indemnification.
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7.1 The Company agrees to indemnify and hold harmless the Agent, each
person who controls the Agent within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended, and the Agent's
employees, accountants, attorneys and agents (the "Agent's Indemnitees") against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act or any other statute or at
common law for any legal or other expenses (including the costs of any
investigation and preparation) incurred by them in connection with any
litigation, whether or not resulting in any liability, but only insofar as such
losses, claims, damages, liabilities and litigation arise out of or are based
upon any untrue statement of material fact contained in the Offering Documents
or any amendment or supplement thereto or the omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, under the circumstances under which they were made, not misleading, all
as of the date of the Offering Documents or of such amendment as the case may
be; provided, however, that the indemnity agreement contained in this Section
7.1 shall not apply to amounts paid in settlement of any such litigation, if
such settlements are made without the consent of the Company, nor shall it apply
to the Agent's Indemnitees in respect to any such losses, claims, damages or
liabilities arising out of or based upon any such untrue statement or alleged
untrue statement or any such omission or alleged omission, if such statement or
omission was made in reliance upon information furnished in writing to the
Company by the Agent specifically for use in connection with the preparation of
the Offering Documents or any such amendment or supplement thereto. This
indemnity agreement is in addition to any other liability which the Company may
otherwise have to the Agent's Indemnitees. The Agent's Indemnitees agree, within
a reasonable time after the receipt by them of written notice of the
commencement of any action against them in respect to which indemnity may be
sought from the Company under this Section 7. 1, to notify the Company in
writing of the commencement of such action, and if the Agent's Indemnitees shall
notify the Company of the commencement thereof, the Company shall be entitled to
participate in (and, to the extent that the Company shall wish, to direct) the
defense thereof at its own expense, but such defense shall be conducted by
counsel of recognized standing and reasonably satisfactory to the Agent's
Indemnitees, defendant or defendants, in such litigation. The Company agrees to
notify the Agent's Indemnitees promptly of the commencement of any litigation or
proceedings against the Company or any of the Company's officers or directors of
which the Company may be advised in connection with the issue and sale of any of
the Securities and to furnish to the Agent's Indemnitees, at their request,
copies of all pleadings therein and to permit the Agent's Indemnities to be
observers therein and apprise the Agent's Indemnitees of all developments
therein, all at the Company's expense.
7.2 The Agent agrees, in the same manner and to the same extent as set
forth in Section 7.1 above, to indemnify and hold harmless the Company, and the
Company's employees, accountants, attorneys and agents (the "Company's
Indemnitees") with respect to (i) any statement in or omission from the Offering
Documents or any amendment or supplement thereto or any application or any
information furnished pursuant to Section 3.4 hereof, if such statement or
omission was made in reliance upon information furnished in writing to the
Company by the Agent or on its behalf specifically for use in connection with
the preparation thereof or supplement thereto, or (ii) any untrue statement of a
material fact made by the Agent or its agents not based on statements in the
Offering Documents or authorized in writing by the Company, or with respect to
any misleading statement made by the Agent or its agents resulting from the
omission of material facts which misleading statement is not based upon the
Offering Documents, or information furnished in writing by the Company or, (iii)
any breach of any representation, warranty or covenant made by the Agent in this
Agreement. The Agent shall not be liable for amounts paid in settlement of any
such litigation if such settlement was effected without its consent. In case of
the commencement of any action in respect of which indemnity may be sought from
the Agent, the Company's Indemnitees shall have the same obligation to give
notice as set forth in Section 7.1 above, subject to the same loss of indemnity
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in the event such notice is not given, and the Agent shall have the same right
to participate in (and, to the extent that it shall wish, to direct) the defense
of such action at its own expense, but such defense shall be conducted by
counsel of recognized standing reasonably satisfactory to the Company. The Agent
agrees to notify the Company's Indemnitees and, at their request, to provide
copies of all pleadings therein and to permit the Company's Indemnitees to be
observers therein and apprise them of all the developments therein, all at the
Agent's expense.
7.3 If for any reason the indemnity provided for in Section 7.1 or 7.2
is unavailable to an Indemnified Person or insufficient to hold an Indemnified
Person harmless, then the Indemnifying Party, to the fullest extent permitted by
law, shall contribute to the amount paid or payable by such Indemnified Person
as a result of such claims, liabilities, losses, damages or expenses in such
proportion as is appropriate to reflect the relative benefits received by the
Company on one hand and by the Agent on the other, from the transaction or
proposed transaction under this Agreement or if allocation on that basis is not
permitted under applicable law, in such proportion as is appropriate to reflect
not only the relative benefits received by the Company on the one hand and the
Agent on the other, but also the relative fault of the Company and the Agent, as
well as any relevant equitable considerations. It is hereby further agreed that
the relative benefits to the Company on the one hand and the Agent on the other
with respect to any transaction contemplated by this Agreement shall be deemed
to be paid in the same proportion as (i) the total value of the transaction
bears to (ii) the fees paid to the Agent with respect to the transaction. The
relative fault of the Company on the one hand and the Agent on the other with
respect to the transaction shall be determined by reference to, among other
things, whether any untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Agent and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The indemnity, contribution and expense reimbursement
obligations set forth herein (i) shall be in addition to any liability an
Indemnifying Party may have to any Indemnified Person at common law of
otherwise, (ii) shall survive the termination of this Agreement, (iii) shall
apply to any modification of this Agreement and shall remain in full force and
effect following the completion or termination of the Agreement, (iv) shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of the Agent or any other Indemnified Person, and (v) shall
be binding on any successor or assign of the Company or the Agent and the
respective successors or assigns to all or substantially all of the Company's or
the Agent's business and assets.
8. Effectiveness of Agreement. This Agreement shall become effective at
9:00 A.M., Atlanta, Georgia time, on the date hereof.
9. Conditions of the Agent's Obligations. The Agent's obligations to
act as agent of the Company hereunder and to find purchasers for the Securities
shall be subject to the accuracy, as of the Closing Date, of the representations
and warranties on the part of the Company herein contained, to the fulfillment
of or compliance by the Company with all covenants and conditions hereof, and to
the following additional conditions:
9.1 Counsel to the Agent shall not have objected in writing or shall
not have failed to give his consent to the Offering Documents (which objection
or failure to give consent shall not have been done unreasonably).
9.2 The Agent shall not have disclosed to the Company that the Offering
Documents, or any amendment thereof or supplement thereto, contains an untrue
statement of fact, which, in the opinion of counsel to the Agent, is material,
or omits to state a fact, which, in the opinion of such counsel, is material and
is required to be stated therein, or is necessary to make the statements
therein, under the circumstances in which they were made, not misleading.
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9.3 Between the date hereof and the Closing Date, the Company shall not
have sustained any loss on account of fire, explosion, flood, accident, calamity
or any other cause of such character as would materially adversely affect its
business or property considered as an entire entity, whether or not such loss is
covered by insurance.
9.4 Between the date hereof and the Closing Date, there shall be no
material litigation instituted or threatened against the Company, and there
shall be no proceeding instituted or threatened against the Company before or by
any federal or state commission, regulatory body or administrative agency or
other governmental body, domestic or foreign, wherein an unfavorable ruling,
decision or finding would materially adversely affect the business, franchises,
license, permits, operations or financial condition or income of the Company
considered as an entity.
9.5 Except as contemplated herein or as set forth in the Offering
Documents, during the period subsequent to the most recent financial statements
contained in the Offering Documents, if any, and prior to the Closing Date, the
Company (i) shall have conducted its business in the usual and ordinary manner
as the same is being conducted as of the date hereof and (ii) except in the
ordinary course of business, the Company shall not have incurred any material
liabilities or obligations (direct or contingent) or disposed of any assets, or
entered into any material transaction or suffered or experienced any
substantially adverse change in its condition, financial or otherwise. At the
Closing Date, and except as otherwise contemplated hereby, the equity account of
the Company shall be substantially the same as reflected in the most recent
balance sheet contained in the Offering Documents without considering the
proceeds from the sale of the Securities other than as may be set forth in the
Offering Documents.
9.6 The authorization of the Securities by the Company and all
proceedings and other legal matters incident thereto and to this Agreement shall
be reasonably satisfactory in all respects to counsel to the Agent, who shall
have furnished the Agent on the Closing Date with such favorable opinion with
respect to the sufficiency of all corporate proceedings and other legal matters
relating to this Agreement as the Agent may reasonably require, and the Company
shall have furnished such counsel such documents as he may have requested to
enable him to pass upon the matters referred to in this subparagraph.
9.7 The Company shall have furnished to the Agent the opinion, dated
the Closing Date, addressed to the Agent, from counsel to the Company, as
required by the Securities Purchase Agreement.
9.8 The Company shall have furnished to the Agent a certificate of the
Chief Executive Officer or the Chief Financial Officer of the Company, dated as
of the Closing Date, in the form attached hereto.
10. Termination.
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10.1 This Agreement may be terminated by the Agent by notice to the
Company in the event that the Company shall have failed or been unable to comply
with any of the terms, conditions or provisions of this Agreement on the part of
the Company to be performed, complied with or fulfilled within the respective
times, if any, herein provided for, unless compliance therewith or performance
or satisfaction thereof shall have been expressly waived by the Agent in
writing.
10.2 This Agreement may be terminated by the Company by notice to the
Agent in the event that the Agent shall have failed or been unable to comply
with any of the terms, conditions or provisions of this Agreement on the part of
the Agent to be performed, complied with or fulfilled within the respective
times, if any, herein provided for, unless compliance therewith or performance
or satisfaction thereof shall have been expressly waived by the Company in
writing.
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10.3 This Agreement may be terminated by the Agent by notice to the
Company at any time, if, in the reasonable, good faith judgment of the Agent,
payment for and delivery of the Securities is rendered impracticable or
inadvisable because: (i) additional material governmental restrictions not in
force and effect on the date hereof shall have been imposed upon trading in
securities generally; (ii) a war or other national calamity shall have occurred;
or (iii) the condition of the market (either generally or with reference to the
sale of the Securities to be offered hereby other than the delisting of the
Company's shares on the Nasdaq SmallCap Market) or the condition of any matter
affecting the Company or any other circumstance is such that it would be
undesirable, impracticable or inadvisable, in the judgment of the Agent, to
proceed with this Agreement or with the Offering.
10.4 Any termination of this Agreement pursuant to this Section shall
be without liability of any character (including, but not limited to, loss of
anticipated profits or consequential damages) on the part of any party thereto,
except that the Company shall remain obligated to pay the costs and expenses
provided to be paid by it specified in Sections 3.5; and the Company and the
Agent shall be obligated to pay, respectively, all losses, claims, damages or
liabilities, joint or several, under Section 7.1 in the case of the Company and
Section 7.2 in the case of the Agent.
11. Agent's Representations, Warranties and Covenants. The Agent
represents and warrants to and agrees with the Company that:
11.1 Agent is a corporation duly incorporated and existing under the
laws of the state of Georgia. Agent is registered with the Securities Exchange
Commission and the NASD and is authorized to receive the compensation from the
Company provided hereunder.
11.2 All corporate actions by Agent required for the execution,
delivery and performance of this Agreement have been taken. The execution and
delivery of this Agreement by the Agent, the observance and performance thereof,
and the consummation of the transactions contemplated herein or in the
Memorandum do not and will not constitute a material breach of, or a material
default under, any instrument or agreement by which the Agent is bound, and does
not and will not, to the best of the Agent's knowledge, contravene any existing
law, decree or order applicable to it. This Agreement constitutes a valid and
binding agreement of Agent, enforceable in accordance with its terms.
11.3 Agent understands that the Company is relying upon Agent's
representations and warranties in connection with the Offering and the sale of
the Securities contemplated by this Agreement.
11.4 Agent's representations and warranties under this Section shall be
true and correct as of each Closing, and shall survive each Closing for a period
of six months.
11.5 No Short Sales of the Common Stock. The Agent shall not directly
or indirectly engage in any short sales or third party short sales of the
Company's Common Stock or hold a "put equivalent position" with respect to the
Common Stock (as defined in Rule 16a-1 under the 1934 Act). Notwithstanding
anything contained to the contrary in this section, in the event that the
Company enters into a private placement transaction (other than in connection
with employee benefit plans, employee or consultant compensation, or in
connection with mergers and acquisitions) which permits the investors rights to
engage in short sales of Common Stock, the restrictions contained in this
section shall be automatically modified to permit the Agent to engage in short
sales of Common Stock substantially to the extent permitted by the Company with
respect to such private placement investors.
12. Notices. Except as otherwise expressly provided in this Agreement:
9
12.1 Whenever notice is required by the provisions of this Agreement to
be given to the Company, such notice shall be in writing, addressed to the
Company, at:
If to Company: 0000 Xxxxxxxxxx Xxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxx & Xxxxxxx, LLC.
0000 X Xxxxxx, X.X. # 00
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
12.2 Whenever notice is required by the provisions of this Agreement to
be given to the Agent, such notice shall be given in writing, addressed to the
Agent, at:
If to the Agent: X.X. Xxxxx Securities, Inc.
Atlanta Financial Center, East Tower
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxx X. Xxxx, Esq.
Xxxx Xxxx Xxxxx & Xxxxx LLP
000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxx 000
1000 Xxxxxxxxx Road, N.E.
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
12.3 Any notice instructing the Escrow Agent to distribute monies or
Securities held in Escrow must be signed by authorized agents of both the
Company and the Agent in order to be valid.
13. Miscellaneous.
-------------
13.1 Benefit. This Agreement is made solely for the benefit of the
Agent and the Company, their respective officers and directors and any
controlling person referred to in Section 15 of the Act and their respective
successors and assigns, and no other person may acquire or have any right under
or by virtue of this Agreement, including, without limitation, the holders of
any Securities. The term "successor" or the term "successors and assigns" as
used in this Agreement shall not include any purchasers, as such, of any of the
Securities.
13.2 Survival. The respective indemnities, agreements, representations,
warranties, covenants and other statements of the Company and the Agent, or the
officers, directors or controlling persons of the Company and the Agent as set
forth in or made pursuant to this Agreement and the indemnity agreements of the
Company and the Agent contained in Section 7 hereof shall survive and remain in
full force and effect, regardless of (i) any investigation made by or on behalf
of the Company or the Agent or any such officer, director or controlling person
of the Company or of the Agent; (ii) delivery of or payment for the Securities;
10
or (iii) the Closing Date, and any successor of the Company or the Agent or any
controlling person, officer or director thereof, as the case may be, shall be
entitled to the benefits hereof.
13.3 Governing Law. The validity, interpretation and construction of
this Agreement and of each party hereof will be governed by the Laws of the
State of Georgia. This Agreement and each Warrant Certificate hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
without regard to the principles of conflict of laws. . The parties further
agree that any action between them shall be heard in Atlanta, Georgia, and
expressly consent to the jurisdiction and venue of the Superior Court of Xxxxxx
County, Georgia, and the United States District Court for the Northern District
of Georgia, Atlanta Division for the adjudication of any action asserted
pursuant to this Paragraph.
13.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be deemed an original and all of which together
will constitute one and the same instrument.
13.5 Confidential Information. All confidential financial or business
information (except publicly available or freely usable material otherwise
obtained from another source) respecting either party will be used solely by the
other party in connection with the within transactions, be revealed only to
employees or contractors of such other party who are necessary to the conduct of
such transactions, and be otherwise held in strict confidence.
13.6 Public Announcements. Except as required by law, prior to the
Closing Date, neither party hereto will issue any public announcement concerning
the within transactions without the approval of the other party.
13.7 Finders. The parties acknowledge that no person has acted as a
finder in connection with the transactions contemplated herein and each will
agree to indemnify the other with respect to any other claim for a finder's fee
in connection with the offering. However, the Company represents that it has
separately engaged, at its own cost and expense, Alexander, Wescott & Co., Inc.
on an non-exclusive basis in connection with the Offering and agrees to
indemnify and hold Agent harmless for any commissions, fees or other expenses
due or payable by the Company to Alexander, Wescott & Co., Inc..
13.8 Recitals. The recitals to this Agreement are a material part
hereof, and each recital is incorporated into this Agreement by reference and
made a part of this Agreement.
13.9 Entire Agreement; Merger; Amendments. This Agreement and the
agreements referred to herein constitute the entire agreement of the parties
hereto with respect to the subject matter and supersedes all other prior oral or
written agreements between the parties. No provision of this Agreement may be
waived or amended other than by an instrument in writing signed by the parties
hereto.
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IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement
to be executed as of the day and year first above written.
"THE COMPANY"
SAF T LOK INCORPORATED
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
"THE AGENT"
X.X. XXXXX SECURITIES, INC.
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
12
EXHIBIT "A"
(Escrow Agreement)
